Court places HSU in administration

The Federal Court has appointed an administrator to the embattled Health Services Union and also declared all positions vacant.

Transcript

LEIGH SALES, PRESENTER: One chapter in the bitter feud involving the Health Services Union closed today. The Federal Court ordered the wind-up of the East branch of the disgraced union, placing it in the hands of an administrator. The Federal Government brought on the court action and has been deeply embarrassed by the affair. But with two police investigations to come, the saga is unlikely to end soon. Here's political editor Chris Uhlmann.

JOURNALIST: Excuse me, Mr Thomson, is it right for the HSU to go into administration?

CRAIG THOMSON, INDEPENDENT MP: It's got nothing to do with me.

KATHY JACKSON: The amalgamation of the union did not cause the corruption the HSU East.

CHRIS UHLMANN, REPORTER: A former national secretary of the Health Services Union ...

JOURNALIST: But is this fair to the workers?

CRAIG THOMSON: It's got nothing to do with me. You should go and ask them.

CHRIS UHLMANN: And the current one.

KATHY JACKSON: I was quite surprised by the judge's decision.

CHRIS UHLMANN: Bitter enemies 300 kilometres apart, but their fortunes are bound to the union which nurtured them and its largest branch is being torn apart.

KATHY JACKSON: The members should decide whether there should be a demerger of the union or whether we should stay together as one big union.

CHRIS UHLMANN: Today, the Federal Court declared the union's East branch dysfunctional and put it into administration.

CHRIS BROWN, HSU ACTING NATIONAL PRESIDENT: Justice Michael Moore has been appointed the administrator. As part of the order, there is a - will be a demerger of the branch into its three constituent parts.

CHRIS UHLMANN: HSU East is a two-year-old hybrid born of a deal struck between the NSW branch, led by Michael Williamson, and two Victorian branches run by Kathy Jackson. That combination meant they controlled half of the Health Services Union's 70,000-strong membership.

(on ABC's 7.30 program): But you helped set up HSU East with Michael Williamson, didn't you, so aren't you partly responsible for whatever corruption there might be there?

KATHY JACKSON: Not at all. I - as soon as I became aware of the corruption, I took my allegations to the police.

CHRIS UHLMANN: Kathy Jackson was paid $270,000 a year for her role as executive president of the HSU East branch, and as its general secretary, Michael Williamson was reportedly paid $330,000. That's all over.

CHRIS BROWN: The executive of the union have now all lost their positions.

CHRIS UHLMANN: The union's brutal internal war would hold little national interest if it wasn't for the link to former Labor MP, now independent, Craig Thomson, and the fact that Labor relies on his vote to keep the Gillard Government afloat.

It's a bit of relief to be out of the spotlight a bit more these days?

CRAIG THOMSON: It's nice to come and have a game of football with some of your mates.

CHRIS UHLMANN: Kathy Jackson's been pursuing the former HSU national secretary since she followed him in the job.

KATHY JACKSON: The HSU first became aware of the questionable financial transactions in May, 2008.

CHRIS UHLMANN: Those transactions included claims Craig Thomson improperly used his union credit card to rack up hundreds of thousands of dollars in personal expenses, nearly 6,000 of that on prostitutes. A three-year inquiry by the industrial umpire found against Mr Thomson. He denies all charges.

CRAIG THOMSON (May 7th): At the end of the day, I'm quite confident that we'll be able to show that these allegations are totally without foundation.

CHRIS UHLMANN: But the union's woes didn't end there. The brawl kept widening as Kathy Jackson fell out with Michael Williamson and the NSW police raided the Sydney office of HSU East.

CHRIS UHLMANN: During the raid, Mr Williamson was caught removing a box of documents.

COL DYSON (May 2nd): I have major concerns that efforts have been made to interfere with information relevant to our investigation. I don't dismiss the possibility of criminal charges arising.

CHRIS UHLMANN: The HSU East branch so tarnished the reputation of unions and embarrassed the Labor government that it was expelled from the ACTU and the Workplace Relations Minister moved to have it put into administration.

BILL SHORTEN, WORKPLACE RELATIONS MINISTER: It was an unprecedented application. It was joined by the whole trade union movement, the branches of the HSU which haven't been dysfunctional, the ACTU, Unions NSW. It's the last thing in the world we wanted to do, but we do wanna make sure that trade unions in Australia, that they're run in the interests of their members and that people have confidence that their union's being properly run.

CHRIS UHLMANN: The sole voice against the move was Kathy Jackson.

KATHY JACKSON: I feel I've been denied an opportunity to have my day in court, to present my evidence. My evidence was never looked at. It was thrown out early on, and I don't think the court has got the power to disamalgamate the branches.

CHRIS UHLMANN: Kathy Jackson's crusade has uncovered disturbing practices in her union and only the police are in a position to decide if it amounts to criminal behaviour, but her own use of union funds is now being questioned.

CHRIS BROWN: Given the accusations are there, on face value they're reasonably serious, then Kathy deserves the right to have those - that independent investigation either clear her or actually confirm that there are some problems there with the finances of the number three branch when she was secretary.

CHRIS UHLMANN: The HSU debacle has led to a push to toughen the rules governing unions.

BILL SHORTEN: So that the public can have renewed confidence that the hard work done by employer organisations and unions, that they're confident that work has been done in the best interests of their constituents.

CHRIS UHLMANN: This is unlikely to be the last we hear of the Health Services Union. There are two police investigations underway; there may well be civil action, and then there's the endless stream of damaging documents that pours out from all sides. Kathy Jackson unleashed hell when she started to pursue Craig Thomson. Along the way the reputations of all unions, Fair Work Australia and the Gillard Government took a hit and there's no doubt that part of the legacy of this affair is an emboldened Coalition, pondering a far-reaching inquiry into the labour movement if it's returned to power.